Enom 2015 Annual Report Download - page 14

12
have an adverse impact on our ability to maintain or increase our revenue from advertising. If any of our advertisers or
advertising providers, and in particular Google, decides not to continue advertising on, or providing advertisements to,
our online properties, or modifies its advertising policies in a manner that could negatively impact yield, we could
experience a rapid decline in our revenue over a relatively short period of time.
We are dependent upon certain arrangements with Google for a significant portion of our revenue. A termination of,
or a loss of revenue generated from, our agreements with Google would have a material adverse effect on our
business, financial condition and results of operations.
We have an extensive relationship with Google and a significant portion of our revenue is derived from advertising
provided by Google. For the years ended December 31, 2015, 2014 and 2013, after giving effect to the Separation, we
derived approximately 36%, 50% and 56%, respectively, of our total revenue from our arrangements with Google.
Google provides cost-per-click advertisements and cost-per-impression advertisements to our online properties and we
receive a portion of the revenue generated by such advertisements. We also utilize Google’s DoubleClick Ad Exchange,
an auction marketplace that allows us to sell display advertising space on our online properties. In addition, we use
Google’s DoubleClick ad serving technology to deliver advertisements to our online properties. Our services agreement
with Google, which governs our various advertising relationships with them, currently expires in October 2016. Google
has the right to terminate its agreements with us prior to their expiration upon the occurrence of certain events, including
if Google reasonably believes that our use of its services violates the rights of third parties, and other breaches of
contractual provisions, a number of which are broadly defined. If our agreements with Google are terminated, or we are
unable to enter into new agreements with Google on terms and conditions favorable to us prior to the expiration of the
current agreements, we may not be able to enter into agreements with alternative third-party advertisement providers or
for alternative ad serving platforms on acceptable terms or on a timely basis or both.
Furthermore, our advertising agreement with Google may not continue to generate the same level of revenue that
we have received from such arrangements during past periods for a variety of reasons, including a reduction in the
amounts Google is able to charge advertisers and the possibility that our online properties do not generate sufficient
traffic to realize our maximum revenue share percentage with Google. Our ability to generate online advertising revenue
from Google also depends, in part, on Google’s assessment of the quality and performance characteristics of Internet
traffic resulting from online advertisements placed on our online properties. In addition, Google may at any time change
the nature of, or suspend, the services that it provides to online advertisers and the catalog of advertisers from which
online advertisements are sourced, or modify its policies with respect to how advertisements may be displayed on a
webpage. These types of changes or suspensions would adversely impact our ability to generate revenue from our
advertising agreement with Google. Any termination of or change in the services that Google provides to us, or a loss of
revenue generated by our advertising agreement with Google, would have a material adverse effect on our business,
financial condition and results of operations.
Mobile devices are increasingly being used to access the Internet and our online media offerings may not be as
effective when accessed through these devices. Additionally, mobile advertising yields are lower on average than
desktop yields, which could negatively impact our business, financial condition and results of operation.
The number of people who access the Internet through mobile devices such as smartphones and tablets, rather than
through desktop or laptop computers, has increased substantially in recent years. If we cannot effectively distribute our
media content, products and services on these devices, we could experience a decline in visits and traffic and a
corresponding decline in revenue. It is also more difficult to display advertisements on mobile devices without disrupting
the consumer experience. We have made, and may make further, changes to the layouts and formats of our mobile sites
in order to improve the user experience or comply with the requirements of our advertising partners, which could
negatively impact our monetization efforts on mobile devices. In addition, mobile advertising yields on average are
currently lower than those for desktop, in part due to the limitations involved in using cookies on mobile devices to track
and optimize mobile advertising and the reduced screen space available to render ads to consumers. The significant
increase in mobile consumption of our media content has contributed to a reduction in our Content & Media revenue per
one thousand visits, or RPVs. As a result of these factors, the increasing use of mobile devices to access our content
could negatively impact our business, financial condition and results of operations.